The current economic crisis has seen merchant cash advance for small business emerge as a new merhcant funding source, taking the small business industry by storm. Merchant cash advance, also called business cash advance or simply a merchant advance or merchant capital is a fast, reliable and low-risk financing source that provides a small business the capital to maintain cash flows or for business expansion. It is like a line of credit, but better! Merchant cash advance companies recover the merchant loans by taking a percentage of the future credit card sales receivables.

Merchant cash advance is more business-friendly than a line of credit or merchant loans and grants. Government grants and merchant loans for small business have long approval cycle times and a strict verification process that works against the merchant funding needs. Weekly cash flows are the lifeline of every small business. However, the credit squeeze during this great recession is making it very difficult for small business to keep the lights on. Business cash advance provides an instant boost to get a small business back on its feet.

There are many advantages to taking a merchant cash advance:

Faster processing time

The time span between the start of the application and disbursement of merchant cash advance is very short. Merchant cash advance companies consider the months you have been in business and the average monthly credit card sales of your small business while determining your eligibility. If you have been in business for over 1 year and have atleast a 6 month history of credit card sales your small business can be approved within 24 hours.

Simple application

Applying for a merchant cash advance is easy. Unlike government grants, lines of credit and loans for small business, merchant cash advance companies do not ask for income tax returns, asset documentations, financial statements or a business plan. There is minimal paperwork required as the only verification a business cash advance company needs from a small business is the length of time it has been in business and the average monthly credit card sales. Many merchant cash advance companies will also waive the application fees and closing costs. The merchant advance for small business application can be completed and submitted within minutes. Some companies even have an online system for submitting the application.

Unconditional use of funds

Merchant advance lenders do not impose any conditions on the use of the cash advance for small business. Small businesses can use the merchant capital for cashing in on a business expansion opportunity, paying bills, personal expenses, or any other purpose. This is unlike merchant loans or lines of credit that have stipulations attached to them.

Fast and easy approval

It is not easy for small and mid-sized businesses to get approval for government grants and loans for small business because financial institutions and banks give a lot of importance to credit scores. Merchant cash advance companies make it easy on the small business owner by focusing on the business' performance rather than its credit history. The amount approved for merchant funding is typically based on the volume of monthly credit card sales of the small business.

No collateral required

Merchant advance providers do not need to secure any collateral from small business owners for the loan. Therefore, small business owners do not have to risk losing their personal assets if the small business goes under. Business cash advance is an up-front payment for a percentage of the small business' future credit card sales revenue. The success or failure of this deal does not affect the credit rating of small business.

Timely repayments

A small business owner agrees to remit a percentage of the credit card sales receipts to the merchant cash advance company by signing a contract. The credit card processing company executes on the contract agreement by deducting the percentage from every future credit card transaction and sending it to the lenders bank account automatically. This ensures that the merchant cash advance lender receives timely payments, while the small business owner is free of tracking payment due dates, signing monthly checks and other paperwork.

Revenue-based repayments

The payment amounts vary based on the performance of the small business’ credit card sales. The merchant advance lenders will see good returns when the small business is seeing high credit card sales receipts and low returns when the small business is seeing slumping credit card sales. This makes the business cash advance company a true business partner by sharing the risk and rewards of the small business.

Merchant Cash Advance makes it possible for small and mid-sized businesses to keep the lights on during this great recession. The inflexibility, risk and long approval cycles of small business loans and grants is making more and more small businesses turn to such funding for their financing and cash flow needs.